(A summaryof EPRF’s recommendations appears at the end of this presentation.)

Good afternoon. There are a number of issues on today’s agenda that I’d like to touch on. I’ll start with agricultural contaminants. I’ll devote most of my remarks to that issue. Later, I’ll briefly comment on other contaminants. And then I’ll conclude with some thoughts on water quantity.

Let me start with our first recommendation:The provincial government should strictly regulate potentially harmful farming activities. It should remove exemptions or special treatment for farming activities from the Environmental Protection Act and other provincial legislation.

Agricultural activities are a major source of harm to the environment and to human health. One concern, of course, is manure. As the Chief Coroner noted in his Part I argument, “cattle and other livestock are reservoirs of organisms that are pathogenic to humans.”1 Increasingly, these organisms may even be deadly. The Chief Coroner reported that in various studies, between 10 and 40 percent of domestic cattle in North America have tested positive for E. coli 0157:H7.2 According to Carlton Gyles, a professor of pathobiology at the University of Guelph, many studies relied on an earlier generation of testing methods and underestimated the problem. Professor Gyles estimates that 30 to 40 percent of Canada’s cattle carry E. coli 0157:H7 at any one time, and that 90 percent of them will carry it at some point in their lives.3 Cattle can also harbour cryptosporidium. It’s believed that the cryptosporidium outbreak that killed over 100 people in Milwaukee – and made over 400,000 people ill – was caused by cattle waste.

Despite the clear hazards of manure, the Ontario government has failed to regulate its storage, treatment, and disposal. Last year, the Environmental Commissioner of Ontario noted that “There are no legally binding standards for constructing manure storage facilities or for the application of manure.”4 Farmers don’t need Certificates of Approval or other permits to spread manure.5 The Environmental Protection Act includes a special exemption for manure. That’s not to say that the province permits all pollution from manure. It has occasionally issued orders or prosecuted hog farmers.6 But it hasn’t taken pro-active action to prevent pollution from manure.

The government has likewise declined to regulate some other potentially hazardous farming activities. According to the Concerned Walkerton Citizens, the government’s 1998 Delivery Strategies indicated that the Ministry of Environment would move away from regulating non-point source discharges. It would no longer deal with agricultural non-point issues.7 And OPSEU will argue this afternoon that the Ontario Water Resources Act exempts certain farming activities.

Another source of special treatment is our right-to-farm law. That’s something I’ll discuss in detail in a few minutes. For now, I’ll just mention that the Environmental Commissioner noted that, as a result of that law, “farm discharges may not be dealt with as vigorously as industrial discharges and emissions.”8

We believe that it’s inappropriate to treat farmers less harshly than other polluters. Pollution from farms should be seen as being no more acceptable than pollution from any other source. Agricultural activities should be regulated as strictly as other industrial activities.

Instead of strictly regulating farming activities, the government has promoted voluntary conformance with recommended practices.9 Unfortunately, this approach has failed to prevent environmental contamination. For that reason, we make the recommendation that the provincial government should require mandatory compliance with laws rather than voluntary conformance with guidelines.

There are a number of reasons why voluntary conformance hasn’t prevented agricultural pollution. First, many polluters don’t choose to participate in voluntary programs. According to the Chief Coroner, in Bruce County, only 20 percent of the agricultural land base is covered by environmental farm plans.10

Second, following current guidelines – even when they reflect best management practices – is often insufficient to prevent pollution. In his argument, the Chief Coroner voiced this common-sense conclusion: “The Walkerton events demonstrate that following the Best Management Practices for nutrient management may not be sufficient to prevent contamination of groundwater.”11

Third, so-called best management practices don’t necessarily include practices that are indeed the best. Take, for example, Dr. Biesenthal, whose farm was the source of the E. coli that contaminated Walkerton’s water supply. Dr. Biesenthal followed what were supposedly best management practices. He had a peer-reviewed environmental farm plan. But as the Chief Coroner pointed out, he didn’t compost his manure. Had he done so, the pathogenic organisms in it would probably have been killed.12 Nor, as ALERT and the Sierra Club noted, did he hire consultants to determine the interaction of his manure management practices with soils, geology, or hydrogeology.13 Thus, his so-called best management practices were wanting on at least two counts.

The Ontario Farm Environmental Coalition revealed the true nature of so-called best management practices. It identified them as “practical, affordable approaches to conserving soil, water and other natural resources in rural areas.”14 Not necessarily the best approaches, but affordable ones. Our foundation is unable to endorse so-called “practical, affordable” approaches if they are not effective in preventing pollution. It is not practical to risk human health. Nor is it affordable for society as a whole.

That brings me to our next recommendation: When regulating farming activities, the provincial government should not confusenormalpractices withacceptablepractices.

There’s a tendency in Ontario to do just that – to equate normal and acceptable farming practices. This attitude is fairly recent, and seems to have its roots in “right-to-farm” legislation. Ontario’s first right-to-farm law was proclaimed in 1988. It was called the Farm Practices Protection Act. The law protected farmers who followed normal farming practices: It shielded them from nuisance lawsuits regarding odour, noise, and dust. A decade later, the law was renamed the Farming and Food Production Protection Act. It was expanded to include light, vibration, smoke, and flies as acceptable disturbances. The new act also prevented municipalities from passing by-laws restricting normal farming practices.

Other legislation also equates normal with acceptable farming practices. The Ontario Environmental Protection Act prohibits the discharge of contaminants into the environment. But it exempts animal waste, provided that the waste is handled in accordance with normal farming practices.15

Such laws have established a mind-set that it’s acceptable for a farmer to harm his neighbours. The preamble to the Farming and Food Production Protection Act acknowledges that some farming activities “may cause discomfort and inconveniences to those on adjacent lands.” But it maintains that it’s in the provincial interest to promote and protect farming “in a way that balances the needs of the agricultural community with provincial health, safety and environmental concerns.”

Now, Ontario’s right-to-farm law does not address water pollution. Be that as it may, it has changed the way people think about water pollution from farms. This was evident in some of the arguments submitted for Part I of this Inquiry. Those arguments illustrate people’s attitudes towards agricultural pollution, and how these attitudes are tied to legislation that permits normal farming practices.

One example comes from the Ontario Farm Environmental Coalition. It noted in its argument that the right-to-farm act does not cover water. Nonetheless, the coalition measured Dr. Biesenthal’s practices – which resulted in the contamination of water – by the standards set out in that very act. It wrote:

Farmers are not permitted to allow materials to enter water that would impair its quality. However, Ontario farmers are protected from nuisance actions by the Farming and Food Protection Act…. The FFPA, together with other guidelines, establishes the concept of reasonable farming practices. The current standards for reasonable practice are outlined in the Guide to Agricultural Land Use… Dr. Biesenthal met all the conditions set out in the Guide.16

A number of other parties stressed the normalcy – and therefore the acceptability – of Dr. Biesenthal’s farming practices. The Government of Ontario wrote: “Although E. coli from cattle manure entered Well #5 and then the Walkerton water distribution system, this did not result from improper farming practices. The family farm adjacent to Well #5 followed normal recommended farming practices accepted by the federal and provincial governments.”17 When the government wrote that these were not improper practices, it was equating what was normal (or legal) with what was proper.

We have the same concern about the Chief Coroner’s comment that “there was no suggestion in the evidence that the Biesenthals’ environmental farm plan was deficient.”18 Again, there was a failure to distinguish between what is normal and legal, and what is sufficient and safe.

The Walkerton Community Foundation went even further. The farmer, it argued, was “doing what he was entitled to do. By all reports, in fact, this farmer and his farm were exemplary examples of how to conduct one’s self in a farm operation, even to the point of the farmer having filed an environmental plan. There is, in our opinion, no criticism of the farm operation that one can make.”19 The foundation thus equated what a farmer is entitled to do with exemplary behaviour.

And it wasn’t alone. Several other parties praised the farmer for complying with best management practices and referred to his management as being of a very high standard.20 Even the ALERT/Sierra Club Coalition called the farmer “a responsible steward of the land.”21

What we’re asking you to do here in Part II is to make a distinction between what is, on one hand, normal (including so-called “best practices”) and what is, on the other hand, proper or sufficient. And then, we’re asking you to propose moving the definition of what is legal from the former category to the latter. We’re proposing a model in which polluting a stream, or a neighbour’s well, would be considered improper and illegal.

We do have a model of such a regime. And that’s the model provided by the common law. Last month, in my presentation on source protection, I went over the law of trespass, nuisance, and riparian rights. In the absence of statutes and regulations pre-empting the common law, any of these might be used against pollution from farms.

Now, I can’t claim to have done exhaustive research on the common law concerning farms, but I’m familiar with enough cases to know that there are some very important principles in the common law that we could – and should – apply to farming today. One such principle is that a farmer cannot justify his pollution on the grounds that farming is in the public interest. Nor can he justify his pollution on the grounds that he has followed best practices.

A case decided by the British Columbia Supreme Court in 1972 illustrates both of these principles. The court found that it was a nuisance to spray a crop with an insecticide which, drifting over the property line, frightened and distressed a farmer’s neighbours. The spraying was a nuisance because it interfered with the neighbours’ enjoyment of their property. In the decision on that case, Chief Justice Wilson pointed out that “It is no defence to an action for nuisance to show that the defendant’s operation of his farm is a useful one necessary to the public interest … or that it is carried on with all care and skill and every effort is made to prevent it from being a nuisance.” The Chief Justice quoted an earlier decision: “Their duty to their neighbour is not merely to take care so as to avoid causing a nuisance. Their duty is to abstain from causing one at all.”22

A 1986 New Brunswick case about manure from a pig farm also illustrates that under the common law, best practices aren’t necessarily good enough. In that case, the court found that the farm’s odours constituted a nuisance. The Court of Appeal acknowledged the farmer’s intention to construct his piggery in accordance with approved practices. It acknowledged that he usually followed the advice of government officials. But nonetheless, he had created a nuisance. And he could not, at least then, obtain a licence to do so.23

In its purest form, the common law creates a zero discharge pollution-control regime. Of course, it’s rarely found in its purest form. Judges will often take account of the reasonable-ness of an activity. They’ll consider the degree to which it harms others, and the character of the neighbourhood in which it occurs. Regardless of these limitations, the common law would obviously prohibit some of the agricultural pollution that is now allowed. Otherwise, the government would have had no reason to bring in right-to-farm legislation.

We’re not advocating that we rely solely on the common law. We are advocating that statutes and regulations leave the common law in place, so that people can protect themselves when governments fail to do so. Thus our recommendation number four: The provincial government should grant no farmer the right to pollute. As I discussed at the last hearing, granting such rights often overrides the common law. More specific is our recommendation number five: The provincial government should rescind the Farming and Food Production Protection Act. No legislation should override the common-law rule that people should use their property so as not to harm another’s. Farmers’ rights to use their property should not trump other rural residents’ rights to be free of pollution.

In 1998, the Iowa Supreme Court ruled that that state’s right-to-farm legislation was unconstitutional. The Court said:

When all the varnish is removed, the challenged statutory scheme amounts to a commandeering of valuable property rights without compensating the owners, and sacrificing those rights for the economic advantage of a few. In short, it appropriates valuable private property interests and awards them to strangers… [T]he challenged scheme is plainly – we think flagrantly – unconstitutional.24

That conclusion wouldn’t apply here in Canada, where property rights aren’t protected in the constitution. But the reasoning behind the conclusion certainly applies. Limiting a farmer’s liability for harms to his neighbour expropriates rights from one party – the neighbour – and gives them to another party – the farmer. Doing so is unjust. And it is environmentally unsustainable.

You’ll remember that our first few recommendations concerned regulation, and our next recommendations concerned the common law. I just want to mention that we see these regimes as being complementary. We believe that the common law has a great deal to offer regulatory law. We’re advocating incorporating principles from the common law into our regulatory regime. Principles such as the internalization of the costs of polluting activities, the right to be free of harm from one’s neighbours, and the responsibility to use one’s own property so as not to harm another’s.

Can we get there from here? Is it be possible to return to a regime of very limited tolerance for agricultural pollution? Sure it is. It’s true that current normal farming practices may inevitably create pollution. But what is normal is not inevitable. Technologies and management systems already exist to reduce pollution from farms. New technologies are under development. One researcher recently found that changing animals’ diets can reduce the amount of nitrogen or phosphorus in their wastes. Important work is being done on treating animal waste on-site to reduce bacteria. One inventor has developed an ozone sterilisation system for pig waste. Another team is working on an anaerobic digester. Farmers are learning new ways of keeping their wastes on their own land. They’re calling on a new cottage industry of consultants to design nutrient management plans. Conservation tillage can cut erosion. Manure injection has been shown to retain wastes and to significantly reduce water contamination.

Most of this research is occurring in the United States, where the government, affected neighbours, and concerned citizens are beginning to crack down on agricultural pollution. In this instance, necessity is the mother of invention. Our problem is that, under the current Ontario regime, there’s no necessity. Farmers don’t have an incentive to innovate. Why should they invest time and money in innovation if their normal practices are acceptable?

The innovations required to make Ontario’s farms sustainable will indeed increase costs to many farmers. But they may well decrease the costs of farming to society, by internalizing costs that are now borne by others. For farms that are marginal economically, the changes may be prohibitively expensive. These farms may go out of business. For hog or cattle farms with particular geological or hydro-geological conditions, sufficient changes may simply be impossible. These, too, may go out of business – at least the animal husbandry business. So be it. We should not prop up polluting farms.

Allowing polluting farms to stay in business forces individual well owners and municipalities to foot the bill. In some cases, they must pay for additional treatment. But additional treatment isn’t always an option. Some contaminants can’t be removed. Sometimes excessive treatment creates its own health problems. In such cases, well owners must pay for well-head protection. They must buy up land around their wells. Given the current regime, well-head protection makes perfect sense. But in a more sustainable, more accountable regime, keeping manure out of water would be considered a cost of farming rather than a cost of providing safe drinking water.

At this hearing, a number of parties are suggesting new subsidies to farmers. The OWWA and the OMWA are recommending loans, grants, and tax incentives to help farmers comply with environmental laws. Conservation Ontario is recommending provincial and federal assistance for water quality improvement projects. OPSEU is recommending grants to facilitate better manure handling.

Not surprisingly, farmers themselves are also lobbying for more subsidies. The Ontario Farm Environmental Coalition has made several recommendations on the subject. In one, it recommended that public funds be entrusted to the agricultural sector for projects ensuring economic and environmental sustainability. In another, it recommended a “Contract with Consumers” whereby the farming community commits to improving its systems and consumers commit to sharing the costs through the provision of public funds.25 That would better be described as a “Contract with Taxpayers.”

We strongly object to subsidizing pollution control on farms. We believe that for reasons of equity, efficiency, and environmental sustainability, it is polluters – rather than victims or taxpayers – who should pay. Our recommendation on this matter reads: The provincial government should require farmers to bear the costs of preventing pollution from their operations. It should phase out existing subsidies to farmers and should not introduce any new subsidy programs.

It’s worth mentioning that any of the subsidies proposed by various parties would be propping up an already heavily subsidized industry. In addition to the environmental subsidies that I’ve been discussing, farming enjoys huge financial subsidies. For every dollar in profit that an Ontario farmer earned over the last decade, Canadians contributed $6.60 in subsidies.26 Across Canada, farmers have required more than $80 billion in subsidies in the last 15 years.27 It’s time to stop pouring money into this industry.

Those are our recommendations on agricultural contaminants. We’ve also submitted five recommendations on municipal sewage effluent. I think we’ve covered those recommendations pretty thoroughly in other submissions. In the last chapter of my study on privatization, I documented the compliance problems of sewage treatment plants and I discussed some of the reasons behind the lack of enforcement. And of course at the last public hearing I proposed several mechanisms to improve enforcement. So unless you have any questions, I won’t spend time on those now.

I’ll spend just a few minutes on the question of other contaminant sources. Our foundation is certainly concerned about the effects of landfills and mines, both of which have the potential to contaminate groundwater and surface water. We’ve been involved in several private prosecutions regarding leaking landfills. Another prosecution involved the Deloro mine site. Discharge from that site has left the Moira River contaminated with arsenic, cobalt, and nickel.

Many of the recommendations that we made to the last hearing on source protection address these issues. The government should not grant the owners or operators of landfills or mines the right to pollute. The government should strictly enforce the law. Statutes and regulations should not override common law rights to clean water.

One new recommendation that we’d like to make concerns financial assurance, or bonding. This recommendation would apply to mining, landfills, and any other activities that involve large amounts of toxic materials. We recommend that the provincial government should require potential polluters to demonstrate that they have adequate financial resources to correct any environmental damage that they may cause. This would mean requiring potential polluters to carry insurance, provide letters of credit, set up escrow accounts, or otherwise guarantee their ability to pay off long-term liabilities. Such a requirement helps internalize the costs of polluting activities. It creates incentives to reduce environmental risks. It also tends to broaden the base of expertise available to deal with pollution issues, since insurers or guarantors are likely, through their own due diligence requirements, to oversee potentially polluting activities. And of course bonding ensures that if a firm goes bankrupt, or abandons its operations, taxpayers won’t be left holding the bag.

In the United States, the federal government is in the process of toughening requirements for the bonding of some mines. Here in Ontario, we’ve moved in the opposite direction. The Harris government has loosened financial assurance requirements for mine closures. We’re concerned that the changes will increase the likelihood of abandoned mines contaminating water sources.

Our final four recommendations concern water quantity. In order to protect the quantity of source water, we recommend that water should be priced to reflect its scarcity.

Pricing is the most effective method of allocating scarce resources. Prices that reflect scarcity internalize the costs of resource use. They encourage users to weigh the costs against the benefits and to seek less expensive alternatives – including conservation – where appropriate.

In Canada, water is generally exempt from any efficient pricing regime. Even providers that charge the so-called “full cost” of water usually charge only for treatment and distribution. In Ontario, the price never includes a resource charge for the water itself. The fact that water is free contributes to our waste of it.

A number of prominent bodies have recommended the establishment of a price for water. Peter Pearse, the Commissioner of Canada’s Inquiry on Federal Water Policy, wrote in his report that the price of water should “recognize the value of the water itself, including its opportunity cost wherever limited supplies are demanded for other useful purposes.” Commodity charges, he said, should vary with availability.

Now, I want to anticipate an objection that the provincial government may raise in response to our pricing recommendation. The government doesn’t actually own the water in the province. It merely administers it. In the past, it’s been reluctant to charge for the use of a resource that it doesn’t own. (In order to get around this problem as it affects the “water rental fees” charged to hydroelectric producers, it defines the charges as fees for the use of provincially owned riverbeds rather than as fees for the use of water.)

We acknowledge that the absence of clear ownership creates challenges to pricing. But we believe that the province – not as an owner but as a trustee, administrator, or manager – has an obligation to protect the resource. In times of scarcity, a user charge would be a very valuable component of resource protection.

Arriving at the right charge for a particular watershed or aquifer will require considerable work. We recommend that the provincial government should establish an economic regulator for water and charge it with determining the appropriate prices for water. This regulator should oversee the pricing of all extractive uses of water – the pricing not only of municipal, industrial, and agricultural uses, but also of bottling.

Our final recommendations on water quantity concern the export of water. This subject may be somewhat removed from your mandate. But it did arise in the expert meeting on protection of drinking water sources, under water quantity. The notes from that meeting say that “impending continental water demands (i.e. United States) were highlighted.”

In many regards, we think the export issue is a red herring. We don’t believe that there’s a significant market in the United States for our water. The costs of desalinating sea water are declining. It will soon be cheaper to treat sea water on site than it will be to bring fresh water from afar. Meanwhile, water demand itself is likely to decline in the US, in part because of experiments with water markets and in part because of new pricing regimes. Also, as US agricultural subsidies decline, there will be less demand for irrigation water. It wouldn’t surprise us at all if, within the next decade, it became obvious that the US has no need for foreign sources of water.

But let’s say for the sake of argument that there is a US demand for Canadian water. We don’t believe that Ontario is in any position to approve water exports at this time. A moment ago, we recommended a new pricing regime for water. We don’t yet know what the prices will look like or what effect they will have on our resource use. We believe that it will take at least ten years of operating in a priced environment to develop confidence that the price of water reflects its value.

Given these current uncertainties, we recommend that the provincial government should impose a ten-year moratorium on the consideration of bulk water exports. To make any decisions before then would be reckless.

Should the demand for bulk water exports remain, we recommend that the provincial government should conduct a thorough public consultation process before approving any exports. Furthermore, it should commit itself to opposing any exports that require subsidies, be they in the form of the underpricing of water, the granting of financial assistance, the approval of environmental harm, or the expropriation of the land or property rights of those living besides lakes and rivers.

And that concludes our recommendations for this hearing.

SUMMARY OF RECOMMENDATIONS

Agricultural Contaminants

1. The provincial government should strictly regulate potentially harmful farming activities. It should remove exemptions or special treatment for farming activities from the Environmental Protection Act and other provincial legislation.Agricultural activities are a major source of harm to the environment and human health. Agricultural pollution should be treated no differently than any other form of pollution.

2. When regulating farming activities, the provincial government should not confuse normal practices – or even so-called best practices – with acceptable practices.Practices that damage the environment or human health should be deemed unacceptable.

3. The provincial government should require mandatory compliance with laws rather than voluntary conformance with guidelines. Voluntary conformance has not worked to prevent environmental contamination.

4. The provincial government should grant no farmer the right to pollute. No legislation should override the common-law rule that people should use their own property so as not to harm another’s.

5. The provincial government should rescind the Farming and Food Production Protection Act.In farming, farmers should not have the right to harm their neighbours’ property. Farmers’ rights to use their property should not trump other rural residents’ rights to be free of pollution.

6. The provincial government should require farmers to bear the costs of preventing pollution from their operations. It should phase out existing subsidies to farmers and should not introduce any new subsidy programs. As subsidies are phased out, farms that are not both economically and ecologically viable will cease operating, benefiting both the economy and the environment.

Municipal Sewage Effluent

1. The provincial government should strictly regulate sewage pollution. It should require mandatory compliance with laws and regulations prohibiting sewage pollution. Voluntary conformance has been thoroughly discredited.

2. The provincial government should restore the common law rights of those adversely affected by sewage pollution. It should remove legislative provisions that override the common law, and it should fully restore the tort liability of the owners and operators of sewage systems.

3. The provincial government should disband the Ontario Clean Water Agency. No provincial agency should operate sewage treatment facilities.

4. The provincial government should facilitate the privatization of municipal sewage utilities. Suitable forms of facilitation could include the creation and distribution of case studies, advice on the RFP process, model contracts, etc. Privatization will attract capital and expertise, and it will promote efficiency, innovation, and accountability. By reducing the conflicts of interest that now prevent the government from enforcing the law, privatization will facilitate strict regulation.

5. The provincial government should phase out subsidies to sewage utilities. Users should bear the full costs of the treatment and disposal of their wastes, including the costs of preventing bypasses and combined sewer overflows.

Water Quantity

1. Water should be priced to reflect its scarcity. Such pricing will internalize the costs of resource use, encouraging users to conserve.

2. The provincial government should establish an economic regulator for water and charge it with determining the appropriate prices for water. The regulator should oversee the pricing of all extractive uses of water, including municipal, industrial, and agricultural uses and bottling.

3. The provincial government should impose a ten-year moratorium on the consideration of bulk water exports. A minimum of ten years of operating in a market environment is required to develop confidence that the price of water reflects its value. Furthermore, within the next decade, changes in the United States – including new pricing regimes, experiments with water markets, diminished demand for irrigation water, and declining costs of desalination – will likely demonstrate that the US has no need for foreign sources of water, obviating the demand for Canadian water.

4. Should the demand for bulk water exports remain, the provincial government should conduct a thorough public consultation process before approving any exports. Furthermore, it should commit itself to opposing any exports that require subsidies, be they in the form of the underpricing of water, the granting of financial assistance, the approval of environmental harm, or the expropriation of the land or property rights of those living besides lakes and rivers.

Notes

1. Chief Coroner for Ontario and the Office of the Chief Coroner, Written argument for Part I of the Walkerton Inquiry, July 31, 2001, p. 278.